I started mining when the bitcoin was worth around £10. I jumped in mainly because I could buy silver bullion coins with BTC (I'm a coin collector at heart) and I hadn't done any techie hobbyist stuff for a while (old ex-hacker).

I've now taught myself a bunch of woodworking skills as well, built a crazy frame for a bitcoin rig and have around 7 GH/sec at my disposal. No expensive GPUs - nothing above £150 per card.

As the exchange rate dropped, and the BTC ended up being worth less than £2, I considered shutting the whole thing down and writing it up to experience. However, on contacting my coin dealer and asking for a quote for another gold 2.5 peso coin, the BTC value had more than doubled (as expected). But the BTC balance in my secured wallet had more than that.

So... every week since I started (June?), I've been able to buy the equivalent of £80-90 worth of silver or gold coins. Regardless of the 'value' of the bitcoin vs. fiat currencies - actually, I measure the value of the BTC vs. gold and silver (which are volatile in their own right) - my miners seem to mine enough to keep the real coin purchasing power the same.

And this is what the BTC difficulty algorithm was intended for, no? Yes, if you mine all week and *then* purchase something, you are exposed to the volatility of the BTC during that week. BTC mined mid-week at £2 per BTC will be worth more at the end of the week if the value rises to £5, and vice versa.

But I haven't seen the massive crash in purchasing power I'd expect from a constant mining operation if the purchasing power of BTC was solely due to its exchange rate against other currencies. As a result, as long as the gold coin I buy each week is worth more than the electricity bill for that week, then I couldn't give a damn about the BTC exchange rate. If mining stops producing enough BTC to buy that gold coin... things will change. But for now, with a *huge* difference between the top and the bottom of the FX rates, but I'm still mining enough to buy a gold coin every week... my shutdown point comes when either the electricity cartels raise the price above around £80-90 a week, or my BTC-to-gold weekly purchases don't work any more.

Right now, because I live in England, I also have the benefit of not having to turn on the central heating - the main mining rig heats the entire first floor and if *still* needs cooling. When ambient air gets even colder, I'll be able to run the bitcoin rigs without active cooling and keep the house warm. That in itself saves some money.

Those using air conditioning to keep their mining rigs cool can't be in the UK - electricity is expensive here, even though we've both got nuclear AND import a bunch of electricity from France, who have LOADS of nuclear. It should be cheaper than it is....

...so I give in to the rhythm, the click click clackI'm too wasted to fight back...

I will shut down when an uncorrectable flaw is found in one of Bitcoin's algorithms, making it unusable.

This is a great answer.

btw, I just received my third elec bill. It was lower by 500 dollars because I used more electricity... Don't you just love capitalism, I got cheaper electricity by killing more trees

So, as long as I keep all the miners humming, my shutdown just went down to the mid 1 dollar range.

It's Stupid things like this that start wars. You fucking got billed Five Hundred dollars less, BECAUSE you used MORE power? So you moved into a different "payment" "bracket"Thats just fucking stupid.Just, Fucking Stupid.I can see where that was created from tho "Use more Powerful tools to build shit and help our government and we'll charge you less"But seriously, That is a fucking Waste of They're own money, Why the fuck did they LOWER your bill by $500,Lets play with this, Just for shits

(All math below has no Real stats)You pay 200/mo for powerYou get a mining farm, Wich should bring the cost up AlotSo lets say that it'd cost you an extra 300/mo to run the farm.So with the farm, And your house, Your spending 500/mo.Now lets pretend that the "bill bracket" Is at 600,If buddy turns More Miners on, Bringing his bill upto 750/moThen he gets slapped with a -$500 price changeMaking him pay 250/mo$50's/mo for the Entire mining farm.Even though the farm is Raping electricity out of the grid at What Should be a pricy amount, It's not, Because he swapped "brackets" It became Cheeper by $500 for him to Use more electricity.

Fuck You, Capitalist, Why are you Raping the Planet and lying? What you say is utter bullshit.

I will shut down when an uncorrectable flaw is found in one of Bitcoin's algorithms, making it unusable.

This is a great answer.

btw, I just received my third elec bill. It was lower by 500 dollars because I used more electricity... Don't you just love capitalism, I got cheaper electricity by killing more trees

So, as long as I keep all the miners humming, my shutdown just went down to the mid 1 dollar range.

I call BS.

I find it equally dubious. Generally electricity is priced in tiers not retroactively.

So for large customers (generally not residential) it may be something like (hypothetical numbers):

0 to 1000 kWh $0.10 per kWh1001 to 3000 kWh $0.095 per kWh3001 to 5000 kWh $0.092 per kWh

I mean if the claim is true why wouldn't companies simply waste power to lower their cost. Rig up a huge number of resistors and simply turn electricity into waste heat. Free money right. Imagine massive electrical consumers (like say aluminum smelter). If their bill was x and they could make it <x by wasting electricity they would build the infrastructure to do so. Simply rig giant blocks of restistor put them on the roof and "burn off" enough electricity to lower their bill.

So power company consumes more resources, gets closer to peak limit of the high capacity lines, and gets less revenue in the process?

On edit:Giving the author of the claim the benefit of the doubt maybe the power company switched to seasonal pricing and his lowered bill had nothing to do with amount of power consumed. I know 1 OCT my electrical rate went down about 15% as the power company switched to "winter" pricing.

I will shut down when an uncorrectable flaw is found in one of Bitcoin's algorithms, making it unusable.

This is a great answer.

btw, I just received my third elec bill. It was lower by 500 dollars because I used more electricity... Don't you just love capitalism, I got cheaper electricity by killing more trees

So, as long as I keep all the miners humming, my shutdown just went down to the mid 1 dollar range.

I call BS.

I find it equally dubious. Generally electricity is priced in tiers not retroactively.

So for large customers (generally not residential) it may be something like (hypothetical numbers):

0 to 1000 kWh $0.10 per kWh1001 to 3000 kWh $0.095 per kWh3001 to 5000 kWh $0.092 per kWh

I mean if the claim is true why wouldn't companies simply waste power to lower their cost. Rig up a huge number of resistors and simply turn electricity into waste heat. Free money right. Imagine massive electrical consumers (like say aluminum smelter). If their bill was x and they could make it <x by wasting electricity they would build the infrastructure to do so. Simply rig giant blocks of restistor put them on the roof and "burn off" enough electricity to lower their bill.

So power company consumers more resources, gets closer to peak limit of the high capacity lines and gets less revenue in the process?

My cutoff point is when I got the electricity bill in, noticed I would never even make half of the extra amount due to mining with bitcoins. Sold 2 out of 3 of my 6990's and keeping 1 for gaming, and mining just for fun and to help in small way for community. 1 6990 gives me 400mh, it still costs me in electricity but not as much as when I was running 3, Every thing is good in moderation including bitcoin mining, My moderation was to mine on 1 card only and still feel okay about helping the bitcoin grow.

Mining "for fun"/at a loss does not help the network. Blocks get generated at a steady, consistent rate no matter how many people are mining thanks to difficulty adjustments. If anything, people mining "for fun" or at a loss are hurting the network by keeping difficulty higher than it needs to be.

Due to the recent difficulty drops combined with the price settling at ~$3.20, I re-enabled my mining rigs since I'm back to an acceptable profit margin after energy costs.

Mining "for fun"/at a loss does not help the network. Blocks get generated at a steady, consistent rate no matter how many people are mining thanks to difficulty adjustments. If anything, people mining "for fun" or at a loss are hurting the network by keeping difficulty higher than it needs to be.

Due to the recent difficulty drops combined with the price settling at ~$3.20, I re-enabled my mining rigs since I'm back to an acceptable profit margin after energy costs.

Higher difficulty is better for the network. That is an absolute truth.

The higher the difficulty the more hashing power it would require to gain 51% control of the network. The purpose of the network isn't to provide you coins. The purpose of the network is to keep the currency secure without the need of a third party.

The "block reward" is a subsidy because transaction volume and taxes are currently insufficient for the network to pay for itself.

The higher the difficulty the more hashing power it would require to gain 51% control of the network. The purpose of the network isn't to provide you coins. The purpose of the network is to keep the currency secure without the need of a third party.

The "block reward" is a subsidy because transaction volume and taxes are currently insufficient for the network to pay for itself.

Higher difficulty = stronger network = stronger Bitcoin.

Although mathematically possible, I disagree that this is a threat.

For a single entity not currently in the network to take over 50% of the hashing power, they'd need to bring ~8.5Thash/sec to the game. I don't think, even using a botnet that one could achieve those numbers.

For a pool to hit this, obviously it'd have to be premeditated in that they wait for the users to push them over 50%. But Miners have the power to make sure hashing power is distributed among the pools.

The higher the difficulty the more hashing power it would require to gain 51% control of the network. The purpose of the network isn't to provide you coins. The purpose of the network is to keep the currency secure without the need of a third party.

The "block reward" is a subsidy because transaction volume and taxes are currently insufficient for the network to pay for itself.

Higher difficulty = stronger network = stronger Bitcoin.

Although mathematically possible, I disagree that this is a threat.

For a single entity not currently in the network to take over 50% of the hashing power, they'd need to bring ~8.5Thash/sec to the game. I don't think, even using a botnet that one could achieve those numbers.

And that is difficult why?Because of high difficulty and large number of miners.

Distribution is important but that is a different (but related) issue.

There was nothing wrong with my quote. Higher difficulty = higher aggregate hashing power.That is a good thing. From a network security standpoint how does lower difficulty help Bitcoin? While it may help you (and me) personally to earn more coins that isn't the point. The coins exists and incentive to keep the network strong.

And that is difficult why?Because of high difficulty and large number of miners.

I still disagree that this is as big a deal as people are making it out to be. Even if total network hashing power were to drop by 50%, a single attack vector would require 4.2Thash/sec to gain the magical 50% hashing power required to cause trouble on the network. So there's two points to be made there:

- 50%+ control of network only allows the attacker to essentially stop transactions + reverse transactions they send.- their control of the network would only be through the next difficulty increase which could possibly net them 50,000 bitcoins if they were able to hold the 50%+ control/block generation

It's my opinion that this type of attack would cost too much to coordinate for a single entity, and as a community we can prevent it from happening by a malicious pool owner by making sure we distribute hashing power among pools. There's not much to be gained by this type of attack vs. the cost/effort involved to exploit it.

In an ideal/healthy bitcoin system, difficulty/hashing/price are self-regulated to the point where mining is barely more profitable than just buying coins.

So I think we just have a difference of opinion here on the impact/risk/probability of this type of attack. And that's OK

- 50%+ control of network only allows the attacker to essentially stop transactions + reverse transactions they send.

Only? Would be like saying I have this machine that if you put in a dollar two dollars come out. However it only doubles money so likely there is no value in it.

Quote

So I think we just have a difference of opinion here on the impact/risk/probability of this type of attack. And that's OK

That wasn't the statement you corrected though.

Is the network stronger or weaker if difficulty is lower. I never said it was a huge risk. It isn't much of a risk (at this level of difficulty) because difficulty IS high. Higher difficulty makes the network stronger. That was my statement you had a problem with.

Saying it isn't a risk because difficulty is strong is like saying: "We have a lot of cops, so crime is low. So why have so many cops. We might as well fire 90% of them because the risk of crime is low."

Is the network stronger or weaker if difficulty is lower. I never said it was a huge risk. It isn't much of a risk (at this level of difficulty) because difficulty IS high. Higher difficulty makes the network stronger. That was my statement you had a problem with.

Saying it isn't a risk because difficulty is strong is like saying: "We have a lot of cops, so crime is low. So why have so many cops. We might as well fire 90% of them because the risk of crime is low."

Since difficulty is tied to hashrate, and the attack vector I'm talking about is the only risk the network runs into when it has low hashrate/difficulty, I think we're still talking about the same thing.